Japan’s Life Insurers Look Like Silicon Valley Bank And 2008 AIG Combined

Nearly $90 billion in bond losses. The real question is what happens when Japanese insurers need cash.

Japan’s life insurers are giving me both Silicon Valley Bank and 2008 AIG vibes.

They are discovering that “safe” in government paper and “doesn’t lose money” are not the same thing. It’s the same lesson Silicon Valley Bank learned a couple years back before collapsing and almost taking the entire US regional banking sector with it. And the illiquidity they might face should a dire need for capital arise would give off echoes of the cash crunch AIG found itself it back in 2008.

Let me explain.